Maine one of few states to see unemployment rise, but economist doesn’t believe stats

AUGUSTA, Maine — Maine’s estimated unemployment rate in December was 7.3 percent, which was little changed from 7.2 percent in November, but an increase from the state’s December 2011 unemployment rate of 7.0 percent, according to data released Friday by the Maine Department of Labor.

Nationally, only six states experienced increases in their unemployment rates between December 2011 and December 2012, while 42 states and the District of Columbia posted declines in the unemployment rate, and two states had no change, according to estimates released today by the U.S. Bureau of Labor Statistics.

The U.S. unemployment rate was estimated at 7.8 percent, the same as it was in November and down from 8.5 percent in December 2011, according to the Bureau of Labor Statistics.

But Glenn Mills, chief economist at the Maine Department of Labor’s Center for Workforce Research and Information, thinks the estimated rates are misleading. When bureau and department release revised employment figures in mid-March, Mills expects the December 2011 unemployment rate will be revised upward, closer to 7.3 percent, which would bring it flat against the current estimate for December 2012.

“I’m convinced those [December unemployment] figures will be revised up,” he said.

It’s not uncommon for the revisions to change the picture, Mills said, adding that employment numbers and unemployment rates can be revised even three or four years down the road.

“So, according to current official data that’s not very reliable, yes, our unemployment rate went up. After it’s replaced I think it will show the rate has been pretty flat for the last two years,” Mills said. “Is it a correct observation? Yes. Is it meaningful? Not really.”

But comparing unemployment rates is not as simple as it seems, the labor department warns. One crucial factor underlying the unemployment data is the labor participation rate. Maine continues to have a higher rate of labor force participation than the country, according to a media release.

“If the labor force participation rate in Maine were as low as the U.S. average, our unemployment rate would be near five percent; if U.S. participation were as high as the Maine average, the national unemployment rate would be near 10 percent,” a media release stated.

The estimated jobless rate for New England was 7.3 percent. Estimates for other states were 5.7 percent in New Hampshire, 5.1 percent in Vermont, 6.7 percent in Massachusetts, 10.2 percent in Rhode Island (tied with Nevada for the highest in the country) and 8.6 percent in Connecticut.

North Dakota continued to register the lowest jobless rate, at 3.2 percent.